Being Asia’s financial heart, Singapore as a nation has definitely defied the odds and has become home to various global firms. It is one of the most sought-after places for various people from across the globe.
Due to high demand, it is also one of the most expensive places to afford a living. If you are a native person, the price for the products is slightly less for you, but if you are a foreigner it is costlier, with a lot more restrictions, which is fair because every government prioritizes their countrymen first.
So, if you are looking to buy a property in Singapore, it Is important for you to be aware of everything – from the cost of living to imposed restrictions.
Disclaimer: While we try to give you detailed information about everything you need to know, this won’t be enough. So, it is advised that you keep researching until you are satisfied. Hope you find this helpful.
What you can and cannot buy?
Instead of explaining to you the Residential Property Act in detail, let me quickly tell you the kind of properties foreigners are allowed to buy in Singapore. Properties like Condos, Sentosa’s Landed houses, Strata Landed houses, and a 10 year or older executive condominium is permitted for your purchase.
Does being a Singapore Permanent Resident (SPR) help?
Yes, a lot. You get access to a lot more property like HBD Flats and condominiums. Moreover, you can also apply to the Singapore Land Authority to buy landed houses, which was otherwise not possible. Lastly, you can also avail a lot of tax benefits.
What taxes will you have to pay as a foreigner?
Getting straight at it, you will have to bear the Buyer’s Stamp Duty (BSD) which is calculated on a successive basis. You will also have to bear Additional Buyer’s Stamp Duty (ABSD), which is different for permanent residents and non-SPRs. But if you are a foreign national of Iceland, Norway, Switzerland, United States, Liechtenstein, no ABSD will apply for you.
As a foreigner, if you earn Singapore-sourced income, you are also liable to pay Withholding tax in Singapore.
Will you be able to apply for a mortgage?
Yes, indeed, but again, it comes with restrictions and requirements. Your mortgage will see limits on the Loan to Value Ratio, as well as, there will be certain minimum mandatory cash down payments.
The Loan to Value ratio is usually around 75%, but since it varies with the age of the individual and the tenure of the loan amount, it can be as low as 55%. And lastly, it doesn’t come as a surprise that you will find a lower Loan to Value ratio and higher Down payment for your second and subsequent homes.
Is an agent a requirement?
Well no, an agent isn’t a requirement or necessity by law, but they are highly recommendable. Since you are not yet aware of all the laws and regulations, it is in your best interest to hire an agent. The buyer’s agent typically charges a fee of around 1%, so if he bids for anything more, you will know you are being cheated.
Now, we will quickly skim over the steps required for a foreigner to buy property in Singapore.
- Decide upon the mortgage type according to your desired budget.
- Find a trustworthy local property lawyer.
- Decide upon the property you desire and make an offer to the seller.
- Finalize your mortgage with the bank.
- Let the lawyer draw up the option and sort the legal requirements.
- Pay the optional reserve fee of 1%.
- You will have 14 days to pay the remaining deposit and continue with the process.
- Let the lawyer prepare documents transferring the title of property.
- Let the lawyer ensure that the sale is registered properly.
Final thought!
Moving to Singapore will be a big decision, but honestly, you will love the shift. Lastly, before wrapping up this think-piece, I would like to end with a small tip that is, do not stop investigating.
Do not restrict yourself to this article, or any article for the matter of fact. Keep researching online, call your friends, family, or relatives residing in Singapore, hire agents online, and do everything in your reach, you won’t be disappointed with your decision.
